Paperboard containers enclosing flexible liquid impervious beverage bags having a dispensing spout which can also be used for filling the bag have become popular. Containers such as this are used for dispensing beverages such as wine, coffee, beer and soft drinks. Currently the paperboard containers are assembled on automated assembly machines into a flat configuration without the bag which configuration facilitates shipping the containers to the customer. The automated assembly machine receives paperboard blanks that have been die cut and creased. The automated assembly machine re-creases the blank to facilitate easier formation of the container, and crushes a flap on the blank that will be used to glue two side panels of the container together to thus connect the vertical side panels of the container. As the blank progresses along the automated assembly machine glue is applied to the glue flap, panels are folded along preformed creases and two side panels are glued together along the glue flap. Pressure is applied for a sufficient time to allow the glue to set. After the blank has been formed into its flat configuration by the automated assembly machine the bag is manually inserted with its spout extending through a spout opening in a panel of the blank. The customer receives the container in its flat configuration with the spout of the bag protruding from the spout opening. The customer erects the container to its three dimensional configuration and fills the bag through the spout. However, since the container and bag has been assembled and shipped in a flat configuration, the surfaces of the bag sometimes cling together after the container has been erected making it difficult to initiate filling the bag. When this has occurred unsanitary conditions can result if something is inserted into the spout to open a passage way to fill the bag. The step of inserting the bags by hand is labor intensive and adds substantial to the cost of manufacturing. This step is also responsible for an unacceptable high rejection rate. Thus, there is a need for a machine and method for fabricating containers of this type that will automatically place the bag in its proper orientation during the automated assembly of the containers in such a way that the throat of the spout will be open to receive liquid when the carton is erected by the customer.